your widget

your widget

Advertisement

31 May 2014

Secretary of State John Kerry and Chinese Premier Li Keqiang both made
high-profile visits to Africa within a week of each other this month.
Kerry sought to resolve the continuing violence in South Sudan and the
Central African Republic, Li came bearing aid and investment deals.
The United States could learn something from Beijing’s economic playbook.

The two leaders’ agendas could not offer a more vivid picture of the
different priorities that each power pursues in Africa. Washington plays
regional peacemaker, while Beijing focuses intently on its long-term
economic interests.

China’s two-way trade with Africa, for example, has grown by 30 percent a
year over the last decade. It is now Africa’s largest trading partner,
importing largely natural resources. More than 85 percent of China’s
imports from Africa consist of petroleum, copper, iron, and other raw
materials needed to build China’s growing domestic infrastructure and
fuel its continued economic growth.

Meanwhile, US engagement in Africa is dominated by security issues —
particularly counterterrorism, counter-piracy and efforts to resolve
internal conflicts. During Kerry’s trip to Ethiopia, Angola and the
Democratic Republic of Congo, he embarked on an ambitious
security-related agenda aimed at promoting democratic elections;
combating Al Qaeda in east Africa, and ending violence in South Sudan,
eastern Congo and the Central African Republic.

Li visited two of the same countries (Ethiopia and Angola) the next
week, as well as Kenya and Nigeria, to pledge $12bn in development loans
to African nations and sign 60 agreements to invest in local energy and
infrastructure projects.

During Li’s visit to Kenya, for example, China offered a $3.8bn loan to
build a railway link between Kenya’s Indian Ocean port of Mombasa and
Nairobi. The first stage of the line would link neighbouring Uganda,
Rwanda, Burundi and South Sudan, increasing intra-regional
transportation networks and trade that are crucial for Africa’s economic
growth.

This $12bn in credit adds to the $20bn in loans that then-Chinese
President Hu Jintao promised to African nations in 2012. Washington does
little to promote US trade and investment in Africa — particularly when
compared to Beijing. The US Overseas Private Investment Corporation,
which encourages investment in emerging markets through financing, loan
guarantees and political risk insurance, has dedicated just $6.3bn to
support US investment in Africa since 1974. Meanwhile, the US Trade and
Development Agency has provided only $90m since 1981 — roughly $3m per
year — to facilitate US business in Africa.

Differences in the China and US trade figures in Africa also underscore
the countries’ divergent priorities. Sino-African trade volumes,
negligible in 2000, hit $198.5bn in 2012. By comparison, US-Africa trade
in 2012 was half that, reaching roughly $100bn. Trade between China and
Africa, meanwhile, is estimated to hit $280bn by 2015, according to
Standard Chartered research.

Chinese imports from Africa overwhelmingly consist of natural resources,
sparking strong criticism that China is seeking to “lock up” Africa’s
resources. The United States, however, has recently upped its economic
game in Africa. President Barack Obama announced the framework for a
signature initiative, Power Africa, while visiting Senegal, Tanzania and
South Africa last summer. This $7bn US project aims to improve electric
generation in African nations.

Africans require both security and economic growth. Global powers like
China and the United States do not need to choose between the two when
focusing their foreign policy efforts. Even as Beijing pursues its
economic agenda in Africa, for example, China has also begun
contributing to regional security - providing troops to United Nations
peacekeeping missions.

Similarly, as Washington seeks to defuse conflict and reduce security
threats across the continent, it should do far more to promote trade and
investment in ways that benefit both US business and African economies.
By supporting Africa’s economic and commercial development, greater US
business engagement can also strengthen security and stability
throughout the region.